Indian stock market: The Nifty 50 index started Monday’s session on a positive note and moved above the 24,300 mark. However, the index failed to sustain at higher levels and witnessed selling pressure during the day.
The morning gains were completely erased, with the index slipping below the 50-DMA and the 50% Fibonacci retracement level on an intraday basis.
In the final phase of the session, buying interest emerged from lower levels, helping the index recover and close above the 24,200 mark. However, the recovery was not enough to turn the session positive, as Nifty ended the day at 24,219.05, down by 32.95 points or 0.14%.
Nifty trapped between key moving averages
A closer look at the price action indicates that the index has been consolidating between the 20-EMA (Yellow line) and 50-EMA (Blue line), over the last couple of session. Despite Monday’s recovery from lower levels, the broader structure remains sideways, with repeated attempts to move higher facing resistance near the 24,300 zone.
The hourly chart also reflects a similar pattern, with every recovery attempt towards higher levels witnessing selling pressure. On the August F&O expiry day, the movement around these two key moving averages would be crucial. A sustained move above the 20-EMA could attract fresh buying interest, while a breakdown below the 50-EMA may intensify the selling pressure.
Key levels to watch on August expiry day
At present, Nifty continues to trade within a narrow range. The 50-EMA, placed around 24,192, remains an important support level, while the immediate resistance is seen near 24,292.
A decisive breakout on either side of this range could trigger a sharper directional move. On the downside, the next important support zone is placed around 24,062, which coincides with the 61.8% Fibonacci retracement level.
On the upside, a sustained move above 24,292 (20-EMA) could open the possibility of a move towards the next resistance zone around 24,370.
Expiry session likely to remain volatile
With the August F&O series expiry scheduled on Tuesday, volatility is likely to remain elevated. The key factor to watch will be whether the index continues to move within the narrow range between the 20-EMA and 50-EMA or witnesses a decisive breakout.
A sustained move above the 20-EMA, supported by short covering, could provide relief to the bulls. However, failure to hold the 50-EMA may bring renewed selling pressure and keep the index under pressure.
Stock to watch: India Glycols
India Glycols is on the verge of a breakout from a horizontal trendline near its lifetime high levels. The recent increase in trading volumes indicates rising buying interest and supports the possibility of a fresh upward move.
The stock is trading above all its key moving averages, the 20, 50, 100 and 200-DMA, highlighting a strong underlying trend. Momentum indicators also remain favourable. The 14-period daily RSI is in an uptrend and has bounced back after taking support near its nine-period average, indicating sustained positive momentum.
The daily MACD has recently generated a bullish crossover and continues to trade above its nine-period average, further supporting the positive technical setup.
Considering the overall technical structure, a sustained move above ₹1,200 would result into breakout of horizontal trendline. On the upside, the stock could move towards the ₹1,270 to ₹1,300 zone. A stop loss can be maintained at ₹1,145.
Disclaimer: The views and recommendations made above are of Dalal Street Journal, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
